The Day at a Glance | March 3rd 2020

G-7 commits to fighting coronavirus consequences

Finance ministers from the seven largest economies in the world, along with some central bank members, had a meeting in order to assess the current economic situation and stipulate measures that will counteract the negative effects of COVID-19. In a statement, they asserted they are closely monitoring the phenomenon and its impact on markets and the economy, but did not outline any specifics. “We reaffirm our commitment to use all appropriate policy tools to achieve strong, sustainable growth and safeguard against downside risks,” the statement reads. The ministers said they are even considering fiscal measures to back the economy. Equity markets have recovered some of the losses recorded last week due to expectations of authorities responding to the contingency; however, in bond markets, long-term U.S. sovereign instruments remain close to historically low levels, reflecting expectations of lower interest rates, low inflation, and low growth as time moves forward. Coordinated efforts around the world are expected to be carried out as well, including cuts in interest rates and fiscal action.

Important day for the Democratic nomination

Today, “Super Tuesday” will take place, in which at least 15 U.S. states will vote on the next Democratic candidate to run in the presidencial race. Pete Buttigieg and Amy Klobuchan have dropped out in recent days, and moderate democrat preferences seem to be inclined towards Joe Biden. However, Bernie Sanders remains a favorite with the Democratic National Convention coming up in July. Sanders has an advantage in key states like California and Texas, while Biden´s mission will be to keep his position as a viable alternative in the race. Markets have not taken well the proposed policies of Sanders, a self-proclaimed democratic-socialist, who bases his campaign on putting universal healthcare into effect, cancelling student debt, imposing taxes on higher income individuals, and greater government intervention concerning market regulations and the economy´s general direction. Throughout his campaign, Sanders has proven to have a great ability to attract voters, but there are still doubts (especially within the Democratic Party) on whether or not he´s the right candidate to prevent Donald Trump´s reelection.